The UK technology sector has emerged as a noteworthy success in today’s economy, with its gross value added (GVA) growing by over 25% from 2010 to 2019, and now surpassing £150 billion.
This progress builds upon a rich history of technological and innovative achievements, from Turing’s pioneering work in computing to advancements in DNA sequencing, and more recently, the development of a robust artificial intelligence (AI) industry, which ranks as the third largest globally and the foremost in Europe. Given this backdrop, it is somewhat unexpected that the UK government only recently established the Department of Science, Innovation and Technology (DSIT), intended to foster “the most innovative economy in the world” and accompanied by a Science and Technology Framework. This initiative was well received by the tech community, providing a vital governmental endorsement for technology and innovation.
A significant aspect of the DSIT’s Science and Technology Framework is the emphasis on five critical technologies: artificial intelligence (AI), quantum technologies, engineering biology, semiconductors, and future telecommunications. These technologies are supported by the National Science and Technology Council, which regularly assesses this list to ensure the UK maintains its global competitive edge.
Each of these technologies, apart from future telecommunications, has dedicated strategies, such as the National Quantum Strategy, designed to establish clear pathways for their integration into UK society and the economy.
Despite the distinct hurdles and commercial pathways each technology faces, they all share a common requirement for success: consistency. It is essential for the government to continue backing these five technologies to enhance strategic advantages, bolster resilience, and leverage emerging technologies for broader benefits.
Case Study: Quantum Commercialization
The UK faces challenges in commercializing its innovations. According to a report from the Tony Blair Institute in 2023, the primary issue lies not in research or ideas—where the UK boasts a vibrant emerging tech startup landscape and a greater number of tech unicorns than any other European nation—but in proving to businesses that they can scale up sustainably and reach international markets from the UK.
Quantum commercialization is poised to be a vital component of the UK tech landscape in the years ahead. The UK quantum industry already contributes £1.7 billion to the economy and has seen an 81% growth since 2013. There are numerous commercial applications that, if successfully deployed, could yield substantial benefits for the UK economy. However, as with any nascent technology, the commercialization process is fraught with complexities, including technical, skill, and operational barriers, and requires sustained investments before profits are realized. Currently, most end-users remain at the proof-of-concept stage for quantum applications.
“The UK struggles to commercialize its innovations. The challenge is not in research or ideas – it is showing businesses that they can scale long term and internationally from the UK.”
—Laura Foster, TechUK
The National Quantum Strategy addresses this commercialization challenge by identifying several initiatives to bridge the gap, including effective government procurement and the introduction of five quantum missions. These missions aim to facilitate commercialization and user adoption across key sectors, such as healthcare.
With a focus on long-term leadership in quantum technologies, the National Quantum Strategy aims to ensure that this leadership translates into commercial success when the time is appropriate. Achieving this will require consistent support, which could potentially lead to a flourishing quantum economy centered around UK businesses.
Case Study: Semiconductors
Semiconductors, commonly referred to as “chips,” are integral to nearly every device we use today, from everyday consumer electronics to vehicles, healthcare technology, and defense systems. They also underpin many key technologies that are shaping the present and future, including AI.
UK industries heavily depend on the global semiconductor supply. A shortage that began in 2020 was estimated to have hindered global GDP growth by 1% in 2021. Supply chain disruptions not only threaten economic stability but also pose risks to critical infrastructure and national security. Consequently, establishing a resilient semiconductor supply chain is crucial for governments worldwide, resulting in intensified global competition.
In May, the UK government unveiled the National Semiconductor Strategy. This initiative aims to cultivate world-leading strengths in semiconductor technologies, focusing on areas such as research and development, design, intellectual property (IP), and compound semiconductors. The strategy commits to investing up to £1 billion over the next decade, which is relatively modest compared to strategies in other nations like the US, China, EU, and South Korea.
Some argue that the UK has missed out on opportunities in the semiconductor sector. However, the strategy acknowledges that, amid the complexity of global supply chains and the multitude of industries relying on this technology, the UK cannot afford to simply overlook its potential. In reality, there are multiple opportunities within the semiconductor supply chain where the UK can play a crucial role. While it may not lead in every aspect, the UK must concentrate on its specializations where it can compete on an international scale, fostering resilience and harnessing international partnerships.
The UK already boasts exceptional capabilities in compound semiconductors, design, and IP. Yet, a recent Institute for Manufacturing study highlights existing gaps in leveraging these strengths.
The new government should champion the National Semiconductor Strategy and implement a coordinated plan to ensure the UK semiconductor industry thrives. It is essential to act swiftly to utilize the rich knowledge, expertise, and potential inherent in the domestic semiconductor industry.
In a recent open letter to the government, TechUK, in collaboration with members of the Chips Coalition, advocated for the formation of a National Semiconductor Institute. This institute would be vital in establishing a strong coordinating entity for the UK semiconductor sector and maximizing the value derived from UK innovation. Although the National Semiconductor Institute was announced prior to the General Election, its future remains uncertain due to a lack of clarity on its development.
The advancements in quantum technologies and semiconductors in the UK, cultivated through decades of pioneering research within universities and industry partnerships, warrant recognition and support. Achieving this requires a consistent approach, which remains a critical priority.
Laura Foster serves as the associate director for tech and innovation at TechUK.